Dollar higher on Fed taper news

  • July 15, 2021

Dollar higher on Fed taper news

The dollar reversed earlier losses and is higher on the day. The dollar started the today on the soft side following yesterday’s dovish comments by Fed Chair Powell. This morning’s news that China’s economic growth data met expectations fueled gains in the CNY/dollar weakness. The dollar rallied after hawkish comments this morning by St. Louis Fed President James Bullard, who argued to taper bond purchases/reduce stimulus on inflation concerns. The dollar is broadly higher, the index up by 0.25%. US and European stocks are lower. US Treasury 10Yr yields fell by 3 bps to 1.32%. Gold and oil prices fell slightly $1843 and $72.00, respectively. Traders await Fed’s Powell second day of Congressional testimony.

“I have no special talent. I am only passionately curious.”
Albert Einstein
  • FX Rates
    July 15, 2021

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The dollar is higher on the day, fueled primarily by Fed’s Bullard hawkish comments. In an interview with Bloomberg, he said the Fed has reached both its inflation and employment goals, suggesting that the Fed should move forward with tapering its bond purchases. Bullard is not currently a voting member of the FOMC. Fed Chair Powell is the key voting member, and he remains dovish, committed to continue stimulus until further progress is seen with economic recovery and employment.

    GBP

    The UK pound moved little overnight, but outperformed nearly all its peers in today’s strong dollar environment. Higher-than-expected inflation and strong employment data fueled demand for the currency.

    EUR

    The euro fell slightly in line with the broadly stronger US dollar. ECB central bank governor Ignazio Visco said that tapering would be avoided, and “monetary policy not be tightened for a long period.” There were no economic data releases for the eurozone today.

    CAD

    The CAD is weaker by nearly 0.30% overnight, reversing a four-day rally in the currency following the Bank of Canada’s announcement that it would continue to taper bond purchases despite forecasts of higher inflation. Existing Home Sales for June were lower by 8.4%, worse than May’s -7.4%.

    ASIA/PACIFIC

    The Chinese yuan reversed earlier losses on news that China’s economic growth met expectations. GDP for Q2 grew by 7.9% YoY, down from 18.3% in Q1.

    The USDJPY trades under 110 and is nearing its lowest levels in a month.

Contact Us

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory

Subscribe to receive the Daily FX Update in your inbox.

By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.

Insights from SVB Industry Experts

 
SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.

Market risk appetite boosts commodity-linked currencies

 

US dollar reversed two-day decline following broader risk sentiment

 

Daily FX Update: USD remains under pressure as markets maintain risk appetite

 

Daily FX Update: Risk-on trading supports commodity-linked currencies

 

Daily FX Update: Inflation concerns push the USD higher

 

Dollar gains vs. other safe havens